Limits to Growth Revisited
By: Travis Strawn*
There are environmental and financial limits to GDP growth. The current global economic paradigm is invested in continuing GDP growth based on a monetary assessment of value. This paradigm is unsustainable. A new sustainable economic paradigm and monetary system that takes into account Earth’s environmental limits is needed.
Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.
Kenneth E. Boulding
The current global economic paradigm today is one where growth is everything. Growth is seen as an imperative that must be facilitated through whatever means necessary. Recessions, depressions, booms, busts, inflation, deflation, costs, profits, and risks are all looked at to fulfill and perpetuate this one thing – growth. Currently the standard measure of growth is Gross Domestic Product (GDP), which has received increasing criticism as a healthy measure of well-being in a society or culture. The concern with economics today is a constant exponential GDP increase of roughly 3% annually per country measured for a “healthy” growing economy. What this means is a continual increase in the activity that GDP measures. This increase in activity means a greater production and consumption of the Earth’s material resources. Take the standard equation and measurement of GDP:
GDP = C + I + G + (X – M)
GDP = private consumption + gross investment + government spending + (exports − imports)
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* Travis Strawn has a BA in Economics from the University of Missouri Kansas City and is a research associate at Seven Pillars Institute.
